Monday, October 04, 2004

The 'MFP' Inquiry

The saga of city's 'MFP Inquiry' is reportedly nearing its final chapter. With the final cost of the inquiry expected to reach $17 million, it's questionable whether the poor Toronto taxpayer will get a good return on this.

In fact, the way the inquiry has been portrayed in the press - with, in my view, an overemphasis on the aggressive sales tactics used by MFP - may scare away potential bidders on request-for-proposals issued by the city. I'll grant that almost no-one in this city approves of Mr. Dash Domi's spare-no-expense sales approach. However, a salesman must adjust his sales approach to the rules, behaviours, and dynamics of his potential client's organization. It would be interesting to know whether MFP's competitors used similarly aggressive tactics in the initial bid process.

However, MFP's behaviour is not at the heart of the matter. They concluded a legal contract with the city. The inquiry was called to find out why and how the contract was extended in value and duration from the initial approved terms. All organizations of any size that enter into contracts to buy (or sell) goods and services have rules in place that cover what is generally called the 'delegation of authority'.

The delegation of authority is a set of guidelines on who in the organization must approve agreements. For example, a front-line departmental manager may have authority to approve purchase orders up to $5,000 - or enter into service agreements up to a certain value and duration. As the value and duration of agreements increase, the authority required to approve rises up the organizational ladder. In a private organization, contracts above the highest threshold will be subject to board approval, or even a to shareholder vote.

In the case of MFP's agreement with the city, surely the original audit must have been able to identify who was involved in somehow circumventing the City's rules on delegation of authority.

There is certainly value in examining how cultural factors within the City bureaucracy contributed to things going awry. There are severe organizational, and moreover cultural, problems in Toronto's City Hall. However, I question the $17 million price tag - and I'm doubtful that Mayor Miller and his cabal have the skills or inclination to tackle them.

I hope the learned judge presiding over this marathon will strongly emphasize the internal organizational and cultural problems. If not, these will get lost in the the glare.

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